Dmitry Balyasny, CEO and managing partner at multi-strategy hedge fund firm Balyasny Asset Management, which has $31bn in AUM, has identified artificial intelligence as the largest tail risk heading into 2026, according to a report by Reuters.
Speaking at Abu Dhabi Finance Week, Balyasny noted that the sector could surprise either on the upside or downside, creating market instability.
On the downside, AI hyper-scalers could cut spending if monetisation falls short, while an unexpected rapid expansion could trigger job losses before workforce retraining keeps pace. “Either of those scenarios could create some instability, but the more likely outcome is that it continues to grow the way that it has,” he said.
Balyasny highlighted Abu Dhabi’s growing financial ecosystem as part of the firm’s expansion, citing inflows of capital, talent attraction, and the city’s focus on AI and technology as strategic advantages.
The hedge fund posted a 2.5% return in November and is up 15.3% for the year to date, reflecting resilience amid market uncertainties and a continued focus on macro and technology-driven risk exposures.
